The Chief Economist, KPMG Nigeria, Oyeyemi Kale, has projected that the Central Bank of Nigeria’s (CBN) Naira redesign policy will drag Nigeria’s Gross Domestic Product (GDP) down in the first quarter (Q1) of 2023 from N10 trillion to N15 trillion.
The former statistician general of the National Bureau of Statistics (NBS) further stated, “This is because about 40 per cent of Nigeria’s N198 trillion GDP in 2022 is informal of which about 90 per cent is cash-based. Further 30 per cent of formal sector GDP is cash-based. This means N106.9 trillion of the total too is cash-based.
“There is nothing new or wrong about currency redesign or cashless policy if done for the right reasons and at the right time. But every policy will have pros and cons and will benefit some but not others. There is no policy that won’t affect someone negatively. Or that won’t have costs.
“Of the 46 economic activities, agriculture, some manufacturing activities (especially food and beverage, textiles, apparels), trade, arts entertainment and recreation, accommodation and food services, road and water transport and other services are expected to be the most affected.
“The idea is to do a cost-benefit analysis looking at the overall impact of any policy and how and when it is to be implemented, across the economy and not just in one or a few areas and deciding if overall, the benefits outweigh costs. If yes then the costs are acceptable.”
Kale urged policymakers to always cushion the negative result of their policies by making palliatives available
“A policymaker can or should introduce palliatives to make the costs bearable to those that will be negatively affected by its implementation.
